Maybe, but what if a concentration on conglomerate banks also makes shocks bigger and more likely? Fans of a Glass-Steagall-style divide between commercial banking and investment banking would say that is exactly what happened. In the US, the separation of banks had a good record of delivering stability to the system from 1933 onwards, right up until the repeal of the act in the late-1990s.

Varley's supporters might mention Northern Rock and Lehman Brothers. Neither were universal banks – one was a mortgage bank and the other was a pure investment bank – and both blew up. But what does that prove? The point, surely, is that Lehman's collapse was so dangerous because the firm, in the form of counter-party, had stuck its tentacles so deeply into the mainstream banking system. A regulatory framework that insisted on greater separation between banks of various stripes might have allowed Lehman to go under quietly. Similarly, Northern Rock was only able to leverage itself to a frightening degree because it had relied upon investment banks to flog its securitised packages of mortgages.

Varley has other arguments and, presumably, will be invited to present them to the banking commission. It may well be true that Barclays has grown in the way it has because it responded to the needs of the customers. It may also be true – sometimes – that "the uncorrelated and asymmetrical" cycles of investment banking and retail banking serve to reduce risk. But there is no guarantee that the cycles will always move in such happy asymmetry. Nor should we accept that Varley's successors will always apply the risk-management techniques of which Barclays is so proud.

Ultimately, the common-sense point made by Mervyn King, governor of the Bank of England, a year ago must be addressed: "It is not sensible to allow large banks to combine high street retail banking with risky investment banking or funding strategies, and then provide an implicit state guarantee against failure."

Many ways to get rid of that implicit state guarantee have been suggested – living wills, contingent capital that can be "bailed in" and stricter capital thresholds for riskier activities. In theory, the introduction of all of these might still allow Barclays to continue in its current form. In practice, the cost of being both big and complex has to be set high to be meaningful.

In other words, we may get to a stage where Barclays itself chooses to spin off Barclays Capital, the investment banking division that currently dominates the group in terms of profits, because life would be cheaper and simpler.

Let's hope so: it would be a good thing for taxpayers. As for Barclays' customers, would they really grumble that their needs would go unmet? Unlikely – BarCap is big enough to stand on its own.